Original | Odaily Planet Daily ( @OdailyChina )

Author｜Azuma ( @azuma_eth )

Lido (LDO), a leading provider of liquidity staking, has finally regained its strength. OKX market data shows that as of 10:00 AM Beijing time on August 11, LDO was trading at 1.52 USDT, a 24-hour increase of 14.21% and a whopping 64.5% increase over the past week.

As the largest liquidity staking protocol in the Ethereum ecosystem, Lido has long dominated the top spot in the total locked value (TVL) of the Ethereum ecosystem and even the entire on-chain ecosystem. Although it has recently been overtaken by Aave, which has grown rapidly by leveraging the momentum of USDe-based asset revolving loans, Lido is still one of the protocols with the most say in the entire Ethereum ecosystem.

The recent rise in LDO can be generally attributed to both macro and micro levels.

Macro: Regulation clarifies attributes, and pledged ETFs are promoted

First, at the macro level, on August 6th, the U.S. Securities and Exchange Commission officially released its Statement on Certain Liquid Staking Activities, which explicitly states that "liquidity staking activities" related to protocol staking do not involve the issuance and sale of securities unless the deposited covered crypto assets are part of or subject to an investment contract. Participants in liquidity staking activities are not required to register transactions with the SEC under the Securities Act, nor are they required to comply with the registration exemptions under the Securities Act for these liquidity staking activities.

In June 2024, the SEC, then still led by Gary Gensler, accused liquidity staking projects like Lido and Rocket Pool of being securities. This negative news sent LDO plummeting over 10% that day and continued its downward trend for a significant period. Just a year later, the newly elected SEC issued a statement clarifying that their business models did not constitute securities, effectively loosening regulatory constraints on the subsequent operation and development of such projects.

In addition to the regulatory shift, another key recent development in the staking sector is BlackRock's application to the SEC to introduce a staking mechanism into its spot Ethereum ETF . While this application is still under review, given the SEC's stance, approval is expected to be straightforward. The market generally anticipates that the approval of the staking ETF will boost business and attract capital for Lido, which currently holds nearly 25% of the Ethereum staked market.

Micro: LDO buyback program finally launched

Compared with the indirect impact at the macro level, the recent discussion on the LDO repurchase plan may be the direct factor affecting the price trend in the short term.

On August 7th, Lido community member Kuzmich submitted a draft of an "LDO buyback plan" to the governance forum. The draft stated that the Lido treasury currently holds $145 million worth of liquid assets (17 million USDC, 11.9 million USDT, 1,220 DAI, and 28,640 stETH), but these assets have not generated any revenue for the protocol.

The draft proposes that Lido should dynamically execute LDO repurchases based on treasury balances to improve the protocol's capital utilization model, boost LDO prices, and ultimately restore market confidence in the value of LDOs. Specifically, the draft proposes that, at the current treasury reserve level, 70% of liquid assets be used for regular LDO repurchases, while 30% be retained in the treasury for operational and strategic needs. When treasury liquid assets fall between $50 million and $85 million, the ratio will be adjusted to 50% repurchase/50% retention. When treasury liquid assets fall below $50 million, the ratio will be adjusted to 0% repurchase/100% retention (with repurchases suspended until the recovery threshold is reached).

According to the Lido Governance Forum's plan, if all goes well, the draft will collect community feedback in the forum from August 7 to 14; then be discussed in the Lido token holder conference call on August 14; then the proposal will be revised based on the feedback from August 15 to 24; and finally submitted to Snapshot for voting on August 25.

Although there are some opposing voices within the community forum, apart from a small number of community members who insist that "buybacks are just a short-term game," most users' doubts are focused on the specific details of the plan, such as whether tokens will be destroyed after the buyback, and the lack of clarity on how to initiate and execute the buyback.

Considering that the draft is still in its early stages and is expected to be further revised after a conference call, and given the recent strong upward trend in LDO prices, we are optimistic that this draft or other repurchase plans derived from its discussions will receive a certain level of community support.

Is the value of ETH finally being discovered?

As one of the ETH series betas, LDO's performance over a long period of time has been difficult to satisfy.

While AAVE surged rapidly above $300 thanks to the momentum of repurchases, ENA surged forward with its business flywheel and treasury plan (see " Up nearly 50% in a week, will ENA be ETH's biggest beta? " for details), and PENDLE opened up new imagination space with Boros (see " Funding rates finally become tradable assets, how does Pendle's sub-platform Boros subvert the arbitrage market? " for details), LDO has been in a relatively weak state for a long time. Even though the expectation of a "staking ETF" has been called for a long time, it has not been able to drive the price performance of LDO over a relatively long period of time.

Under the dual stimulus of macroeconomic and microeconomic factors, LDO is finally showing some signs of a trend reversal. Could this be the beginning of price discovery for ETH, the "prince" of the world? It's too early to tell, but there is some hope.